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Bank of America, Citi and JPMorgan Chase reported earnings that beat expectations -- despite a drop in investment banking and trading income. Results were buoyed by lower losses on loans and credit cards and resulting cuts in loan reserves that were bigger than expected.

Florida banks are asking federal regulators for a break from government-ordered capital raising as they struggle with the impact of the real estate bust and the BP oil spill.
Florida%u2019s top banking lobbyist sent a letter to the Federal Deposit Insurance Corp. Chairman Shelia Bair and Federal Reserve Chairman Ben Bernanke, asking that all local banks get a 12-month reprieve from higher capital requirements, loan appraisals and new regulatory sanctions, the Wall Street Journal reported.

The financial reform bill contains a "bank tax" creating a fund to cover the costs of a big financial firm's collapse. Banks worry new changes mean the fund may have to cover any bailout of Fannie Mae and Freddie Mac -- who are staggering under problem loans from banks.

Germany and Britain have announced plans to slash government spending, and many are worried this will torpedo the global recovery, including the fragile U.S. expansion. The first areas likely to feel the pain are U.S. exports and banks.

Analysts' expectations for Bank of America are modest: EPS of 9 cents, down from 44 cents in the year-ago period. But with rival JPMorgan Chase's profits buoyed by strong fixed income trading, the pressure is on the bank's Merrill unit to deliver a robust performance.

The financial crisis has claimed seven more banks, bringing the total number of casualties this year to 140. The FDIC took over all seven of them: Two large banks in California, and smaller ones in Alabama, Florida, Georgia, Michigan and Illinois.